What is the labor theory of value?

Hmmm...i hope you don't expect us to do all your thinking for you ;-p

but we can give you links for you to read and evaluate yourself.

watch this
https://kapitalism101.wordpress.com/2010/05/13/law-of-value-3-das-mudpie/

read this
https://kapitalism101.wordpress.com/2012/04/05/value-cant-be-created-in-exchange/

watch this
http://www.worldsocialism.org/spgb/video/marx-and-economics

read this
http://www.worldsocialism.org/spgb/education/study-guides/guide-value-price-and-profit

And this
http://www.worldsocialism.org/spgb/education/study-guides/russian-revolution-and-bolshevik-dictatorship-and-labour-theory-value

A bit dated but still useful as an easy read is John Keracher's Economics for Beginners
http://www.marxists.org/archive/keracher/1935/economics-for-beginners.htm

On this site, Andrew Kliman is available for deeper analysis
http://libcom.org/files/kliman.pdf

Also, related discussion of this topic here: https://libcom.org/forums/theory/labor-theory-value-28042010

Maybe give this a shot as well:

https://libcom.org/forums/theory/law-value-simplest-terms-03022016

the first chapters of capital volume one will be pretty boring if you know the labour theory of value already.. on the other hand - why not start with an advantage, its hard enough to read even so.

its the theory of what "value" is, that it is the average necessary work time to create a thing-of-certain-use (good). as for "value", dont think justice or freedom "values", think money-value. the proof is in trade people relate to something which both ends of the agreement thus must have in common, the only material thing that could be that is work. as the amount of work needed to produce something is not a physical property of the thing - its a bit hard to "prove". but that is not a refutation - try finding a scientific prove that you love your mum or something.. its not natural science, its social science.

i guess this explanation isnt very precise, but i only took 5 minutes. the links are prolly better, i dont know. i just know capital needs a lot of pages to explain this in all depth.

yourmum

the first chapters of capital volume one will be pretty boring if you know the labour theory of value already.. on the other hand - why not start with an advantage, its hard enough to read even so.

It is worse than that -- it assumes you understand the theory which makes the whole thing somewhat obscure to the reader. So I would recommend you read Ricardo's Principles first:

On the Principles of Political Economy and Taxation

That explains it well -- you do need to understand the difference between (actual, real) prices and (exchange) value. And you should also remember that volume 1 of Capital abstracts from differences in investment and assumes price equals value (in order to show how exploitation happens in production).

I would also suggest Unfinished appendix on economics

The key is to understand that the "labour theory of value" is a model used to understand how capitalism works -- so it is an abstraction which seeks to understand the dynamics of the system. This "law of value" (to use Proudhon's term) explains how prices adjust and move towards equilibrium by fluctuating around the cost of production.

It is also used to argue that labour is exploited within capitalism -- which is how Proudhon used it, as well as to explain how markets function. The argument is that labour create value and so labour should receive the full product of its toil -- for Proudhon, this meant co-operatives replacing wage-labour, for Owen it meant pricing goods by the time used to produce them within socialist communities.

The latter and the former need not both be accepted -- Ricardo did not consider labour to be exploited, for example, although Adam Smith did argue that labour shared the value it produced with employers, landlords, etc.

If you're interested in Marx's LTV, just read Marx. No need to read any Ricardo, Say, or any other political economist. That's for people who want to get a really in depth understanding of Marx's critique. I mean, you may as well also suggest that you should read Hegel as well...

Sure, the first few chapters of Capital is tough going the first time, but it's even tougher if you think you have to read all kinds of other shit first.

@Anarcho: i dont think he wanted to hear the whole history of classical value theories, just the one of marx. could be wrong, of course.

And ''.. labour should receive the full product of it's toil..'' would be an aspect of the theory's application that Marx criticised as an oversimplification as I recall.

exactly, mike. exchange value needs to go, not made holy and absolute. because it is the thing property reflected in all things. producing value is absurd and destructive and fair wages, fair prices, fair incomes... all of it is just foolishness.

Take the theory of water motion. We pipe water, we regulate its flow differently in ordinary wells, in artesians, springs, etc. Is the theory of the flow of water explained by listing the specific bores, drills, pumps, and pipes? No. There is an abstract physical theory of the flow of all water, the science of hydraulics, and this abstract theory ignores the individual forms of the motion of water, describes no particular form of water whatever, and describes no actual phenomenon exactly as it takes place. But its theory describes them and its laws govern them and unless we have this abstract theory we have no means of understanding anything. And this despite the fact that water is abstractly described and yet, in practice, it is always concretely availed of.

We ask how and where does profit come from? From surplus-value. And that? From labour-time. And how does it flow? Through pipings composed of constant and variable capital. And how is it sprinkled or flushed throughout the economic system? As an average rate of profit. But the law of the composition and flow of value, like that of the composition and flow of water, is the same throughout. If you cannot correlate all the forms of conducting and utilising water exactly in conformity with the governing theory of hydraulics, that unfortunately is the nature of the world we live in and no one can transcend it, not even Böhm-Bawerk.

That no science is capable of application to every permutation and combination of circumstance, under the exact application of theory, is the weakness of man's mind, of his perception of the world. Is that a reason for repudiating science? Then all political economy (and all knowledge) is equally threatened. We abstract from a hundred appearances to get one common explicatory factor.

[from Elements of Marxian Economic Theory and its Criticism by William J. Blake]

Yeah the first sections of capital aren't that much of a mindfuck. Like its DEFINITELY not on the same level of Hegel's aphoristic sounding hogwash.

'Dialectics' was essentially a mode of presentation for Marx in Capital. To understand most of Marx and Engels work, Historical Materialism is far more important than 'dialectics' which today, basically means emergence.

But read Marx, because if you assume (erroneously) as Anarcho does that Marx was a big bad plagiarist and you can just read Ricardo and Proudhon, you'll miss out on all that Marx has to offer which is quite unique.

What do you mean by dialectics referring to emergence? I assume that emergence is taken from complex adaptive systems? I've made similar thoughts in the past, though now I'm not as convinced due to how formally Marx is in developing categories dialectically. Then again, I'm may not understand emergence properly.

I guess there are two aspects:

There is dialectics as the mode of presentation of two concepts, which doesn't even really depart from Hegel. It's a way to present related concepts in terms of the key aspects of their relationship.

I guess this is how individual actions could be thought to aggregate up, or scale up. Such that the 'macro' has its own laws or is somewhat distinct from the picture at the micro level. Part of the unique aspects of the macro phenomenon 'emerge' in someway (perhaps not understood) from the interactions of the micro.

But that's some pretty flimsy stuff, I'm willing to admit, haha.

That's what I assumed you meant. Thanks for clarifying.

The so called labour theory of value is based on the law of value.

Which was ‘investigated’ by Adam Smith.

A scientific law is simply an observation of a correlation between two 'measured' values.

Thus the sales of ice cream goes up with temperature or the pressure of a gas goes up with temperature.

Or in our case the price of commodities seem to go up with the increasing amount of labour spent making them.

Actually for a law you don’t need to have a ‘why’ or even a implicit idea over how or why one ‘measured’ value might be causing the another ‘measured’ value to increase or vice versa.

In fact there is always the possibility of a ‘tertiary’ or third thing affect.

Eg a ‘third’ thing could be causing two other things to increase or decrease simultaneously and thus there is in fact no direct correlation between the two.

Eg ‘criminality’ and ‘IQ scores’ ?

Thus;

A scientific law is a statement based on repeated experimental observations that describes some aspects of the universe. A scientific law always applies under the same conditions, and implies that there is a causal relationship involving its elements. …………… A central problem in the philosophy of science, going back to David Hume, is that of distinguishing causal relationships (such as those implied by laws) from principles that arise due to constant conjunction.
Laws differ from scientific theories in that they do not posit a mechanism or explanation of phenomena: they are merely distillations of the results of repeated observation.

https://en.wikipedia.org/wiki/Scientific_law

You can reject any posited causal relationship and posit another; thus by saying that price is in fact correlated to use value or correlation with labour time is spurious and coincidental.

Which as Karl said was the final conclusion of Aristotle after he used the same ‘logic’.

The main thrust however of Karl’s chapter was this same purely logical analysis of the situation

1] if two things are equal then something about them is being measured by a ‘measuring device’.

2] then that something about both of them must be the same, or the ‘measuring device’ is measuring something that is common to both. Or in other words the measuring device is impartially measuring the same thing.

[ Eg ----“It tells us that in two different things – in 1 quarter of corn and x cwt. of iron, there exists in equal quantities something common to both. The two things must therefore be equal to a third, which in itself is neither the one nor the other. Each of them, so far as it is exchange value, must therefore be reducible to this third.”]

3] Then it is a matter of attempting to work out what a coat and a piece of linen have in common.

4] then, only once you have done that , you might want move on to how the measuring device is working.

In that order.

Thus price is the Effect that labour time value has on the ‘exchange value’ measuring device of the ‘market’.

If we go back to the temperature analogy, as measured say with a mercury thermometer.

As such, according to thermodynamic theory or whatever, it doesn’t exist as that.

It is the kinetic energy of molecules rattling around with varying degrees of vigour.

The affect it has on the mecury in the thermometer is a platonic, shadow on a cave wall, phenomena.

The 'hidden value' that causes it is the kinetic energy of the atoms or molecules or whatever.

Likewise the (measurement) of pressure is an effect of the (differential- from the inside and outside) kinetic energy of the gas molecules pummeling on the inside of the chamber.

yourmum

@Anarcho: i dont think he wanted to hear the whole history of classical value theories, just the one of marx. could be wrong, of course.

Actually, the OP didn't specifically mention Marx so Anarcho is not really out of bounds in recommending Proudhon, or for that matter even Ricardo, to the OP since as I understand it (I know of Ricardo but have never read anything by him, BTW) both of them, like Marx, utilized the idea of the LTV in their writings.

Another thing, did not some anarchist-communists such as Kropotkin basically reject the idea of a LTV in that they appear to have proposed that the various factors of production were actually social in nature and could not thus legitimately be attributed solely to the laborers directly involved in the production of any single product? For example, that the carpenters building furniture in a workshop would not have the wood without the labor of the lumberjacks and workers at the mill that processed the wood, nor would they have the nails if it were not for the labor of miners who collected the steel that that whomever the heck it is that makes the nails that our previously mentioned carpenters use to hold together the furniture that they construct in their workshop, and that none of this would be possible if it were not for the labors of countless other workers building and maintaining the transportation corridors and laboring to make the foodstuffs to feed for the virtual army of laborers involved in the entire process of production. Sorry if my example is clumsy, at least it seems clumsy to me, but I think you will all get my point about how I understand that Kropotkin rejected, or at least brought into question the idea of a LTV, or maybe I just misunderstand the LTV as articulated by Marx, Proudhon, etc., and perhaps even Kropotkin's take on things, - meaning the LTV.

According to Karl the value of a commodity is the time (already spent or expended) on the raw material eg the wood cutting etc of the lumberjacks etc plus the ‘additional’ time spent on converting it into furniture etc.

the wood cutting time etc of the lumberjacks is the ‘constant capital’ of the next phase of the operation eg furniture making which is furniture making time.

the value of the furniture is thus lumberjacking time + furniture making time.

https://theanarchistlibrary.org/library/wayne-price-in-defense-of-the-anarchist-use-of-marx-s-economic-theory

Sike

Actually, the OP didn't specifically mention Marx so Anarcho is not really out of bounds in recommending Proudhon, or for that matter even Ricardo, to the OP since as I understand it (I know of Ricardo but have never read anything by him, BTW) both of them, like Marx, utilized the idea of the LTV in their writings.

While the OP didn't mention Marx, s/he wrote

OP

Before getting into Capital Vol. 1, I'd love to be given a basic understanding of the LTV and the proofs for it. Assume I am 100% ignorant. Thank you!!!

So pretty clear s/he asked specifically about Marx. And with the 100% ignorant comment, suggesting that the OP should read Ricardo before Marx is just bad advice.

Another thing, did not some anarchist-communists such as Kropotkin basically reject the idea of a LTV in that they appear to have proposed that the various factors of production were actually social in nature and could not thus legitimately be attributed solely to the laborers directly involved in the production of any single product?

If they rejected the LTV on that basis they seriously misunderstood it in that case. Marx's entire point is that production is social and cannot be reduced to any individual, any individual point of production. Indeed, the very concept of value is inherently social.

Khawaga

[While the OP didn't mention Marx, s/he wrote

OP

Before getting into Capital Vol. 1, I'd love to be given a basic understanding of the LTV and the proofs for it. Assume I am 100% ignorant. Thank you!!!

So pretty clear s/he asked specifically about Marx. And with the 100% ignorant comment, suggesting that the OP should read Ricardo before Marx is just bad advice.

Fair enough, in my haste I overlooked that.

If they rejected the LTV on that basis they seriously misunderstood it in that case. Marx's entire point is that production is social and cannot be reduced to any individual, any individual point of production. Indeed, the very concept of value is inherently social.

Actually, I was in error, in retrospect I think that as communists both Marx and Kropotkin shared similar positions as regards the LTV at least insofar that both accepted the basic premise that all value is inherently social. I guess it would be kinda hard to be a communist without accepting that idea as basic premise.

Khawaga

So pretty clear s/he asked specifically about Marx. And with the 100% ignorant comment, suggesting that the OP should read Ricardo before Marx is just bad advice.

On the other hand, why exactly would it be preferably to read Marx before reading Ricardo? This of course assuming that one intends to read Ricardo in the first place. Or is having a good grasp on the LTV contingent upon reading and understanding Ricardo, and Marx, as well as Proudhon?

If you really want to get down and dirty with the LTV, you'd have to read quite a few people including Ricardo, Smith, Say, and many more. Marx, after all, critiqued them. But if you're just interested in a critique of capitalism, then Marx is the one to read.

Or is having a good grasp on the LTV contingent upon reading and understanding Ricardo, and Marx, as well as Proudhon?

Some people may say that, but I can't for the life of me understand how you would have a good grasp of the LTV (in its various iterations) unless you've actually read some of the people you've mentioned. So my recommendation is always to just dive into the deep end with this stuff just to get through it the first time. You'll never understand this stuff on the first read through (and if you can, then kudos!).

Edit: to add that getting through the text one time in order to re-read it. In my experience, there is no other way of reading Capital.

Thanks, Khawaga, sounds like good advice.

Also, the advice in the following Libcom article seems helpful:

Scaling the wall: what to do if you get stuck while reading Marx’s Capital

Actually, I'm in the process of reading Proudhon's Property Is Theft. After which I'll probably attempt to read Capital Vol. 1., which I had actually attempted to read a number of years ago but after getting through the first few sections ultimately failed to follow through.

Yes, that article is good. I am pretty sure that some of the advice I just posted may have come from that piece. I remember reading it after I had failed two or three times to get past chapter three (no joke). Although, the best way to read Capital is in a group. That's how I got through it the first time.

Kropotkin on LTV in philosophy and ideal of anarchism:

Firstly, the duration of time given to any work does not give the measure of social utility of the work accomplished, and the theories of value that economists have endeavored to base, from Adam Smith to Marx, only on the cost of production, valued in labor time, have not solved the question of value. As soon as there is exchange, the value of an article becomes a complex quantity, and depends also on the degree of satisfaction which it brings to the needs — not of the individual, as certain economists stated formerly, but of the whole of society, taken in its entirety. Value is a social fact. Being the result of an exchange, it has a double aspect: that of labor, and that of satisfaction of needs, both evidently conceived in their social and not individual aspect.

On the other hand, when we analyze the evils of the present economic system, we see — and the worker knows it full well — that their essence lies in the forced necessity of the worker to sell his labor power. Not having the wherewithal to live for the next fortnight, and being prevented by the State from using his labor power without selling it to someone, the worker sells himself to the one who undertakes to give him work; he renounces the benefits his labor might bring him in; he abandons the lion’s share of what he produces to his employer; he even abdicates his liberty; he renounces his right to make his opinion heard on the utility of what he is about to produce and on the way of producing it.

Thus results the accumulation of capital, not in its faculty of absorbing surplus-value but in the forced position the worker is placed to sell his labor power: the seller being sure in advance that he will not receive all that his strength can produce, of being wounded in his interests, and of becoming the inferior of the buyer. Without this the capitalist would never have tried to buy him; which proves that to change the system it must be attacked in its essence: in its cause — sale and purchase, — not in its effect — Capitalism.

https://www.marxists.org/archive/marx/works/1847/poverty-philosophy/ch01.htm

this also kinda works as an introduction i guess. as for the "various iterations" - it depends if you want to learn what the real thing is or get into the history of the ideas about it. its like learn that the earth goes around the sun spinning around itself - or learn that first humanity thought the sun was pushed up in the sky by a god, then that the sun went around earth.. and so on.

for people fluent in german and the relevant words to the matter (and can deal with peter's accent :D), this is the best introduction ive heard (by peter decker):

https://www.youtube.com/watch?v=jVVNVwcWlic

If you want to read something to "ease" you into Capital, try A Contribution to the Critique of Political Economy. I would also recommend the writings known as Economic Manuscripts 1857-64; this includes the Grundrisse; Theories of Surplus Value; another iteration of A Contribution to the...

Here's the intro that yourmum mentions in English:

http://www.ruthlesscriticism.com/introcapital.htm

Marx didn’t consider it a great discovery that the substance of exchange-value is labor; he was interested in explaining the role played by labor in forming value. Economists long before him had figured out that products are products of labor and that they exchange because they are products of labor. However, in Marx’s view, earlier economists like Smith and Ricardo hadn’t seen what this shows about the character of labor ... Labor only forms value in the sense that it requires sacrifice: in that brain, muscle, and nerves are expended. The nasty side of labor, that one loses time that could be spent in enjoying life and the products of labor, this negative side of labor is what constitutes the social validity of labor in capitalism. From a rational point of view, the social accomplishment of labor would be the benefit that the labor contributes; in the use-values that are produced, not in the toil that the labor requires. It is connected negatively to the benefit.

yourmum

for people fluent in german and the relevant words to the matter (and can deal with peter's accent :D), this is the best introduction ive heard (by peter decker):

https://www.youtube.com/watch?v=jVVNVwcWlic

Just out of curiosity, what sort of accent is that? I find it quite pleasant to listen to and not that difficult to understand.